Cloud business booms for IBM


Cloud business booms for IBM

Simon Quicke

IBM has already more than doubled the cloud revenue it generated last year in the first three quarters of 2011 underlining that the hosted side of the business is growing faster than almost any other.

Big Blue has been talking up the cloud to resellers over the course of this year and it appears to have chimed in with both customers and partners with revenue rising significantly along with some of the tools firms are using to adapt their infrastructure including Smarter Planet and business analytics, which saw revenue climb by 50% and 19% for the year to date.

The Q3 numbers also revealed that software revenue was up by 13% and services revenue had increased by 8% with a backlog of business worth $137bn. Revenue of $26.2bn was up by 8% and pre-tax profits of $5bn was a 7% year-on-year rise.

But despite those numbers the share price dropped as the vendor matched rather than exceeded expectations. It did however raise its guidance on Q4 which should keep some of Wall Street happy.

Performance in EMEA was flat when you take currency fluctuations into consideration and OEM revenues dropped by 8% year-on-year but the growth markets of Brazil, Russia, India and China all delivered double digit growth delivering 23% of IBM's geographic revenue for Q3.

Sam Palmisano, IBM chairman and CEO, said that the growth markets delivered "outstanding revenue performance" and it also was buoyed by "strong results in Smarter Planet, business analytics and cloud."

In terms of the specific segments of the business global services grew by 8% with the technology services side performing better than the business services operation, which remained flat.

On the software front the middleware products, including Websphere, Tivoli, Lotus and Rational, all saw revenue increases ranging from 6 to 13%.

Hardware saw mixed fortunes with the System x line managing a 1% increase while the System z mainframe products declined in revenue terms by 5% year-on-year.
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